I left Ameriprise, but what was my broker doing?

[Red35]

I didn't start trying to educate myself on investing until last year. I foolishly trusted my Ameriprise Broker.

I would send him 2 checks every year totaling $7,000. I would tell him to put $5,000 in my ROTH IRA and $2,000 in my SEP IRA. Everything else I left up to him and trusted him.

I have looked at my past statements and how he was investing my money.

For example he has me in a couple Open End Mutual Funds and one is Small Cap World Fund B (SCWBX).

Every month he would purchase a very small quantity. It would be weird stock quantities like 1.799, 1.846, 1.851, 1.799, etc.


The only reason I can think of to make so many small stock purchases is to get the COMMISSION CHARGE every time.

I noticed it is also a LOAD FUND!

Does anyone have an explanation as to why he would make so many small purchases?

 

[samclem]

That sounds like the small purchases that result from reinvesting dividends. Maybe he was buying new shares in that B-Fund with the dividends from the same fund or from other funds you owned with him? Maybe it was interest from a MM fund or sweep account?

All this is legit.

Congratulations on your escape from Ameriprise. Now, tell a friend.

 

[FinanceDude]

I didn't start trying to educate myself on investing until last year. I foolishly trusted my Ameriprise Broker.

I would send him 2 checks every year totaling $7,000. I would tell him to put $5,000 in my ROTH IRA and $2,000 in my SEP IRA. Everything else I left up to him and trusted him.

I have looked at my past statements and how he was investing my money.

For example he has me in a couple Open End Mutual Funds and one is Small Cap World Fund B (SCWBX).

Every month he would purchase a very small quantity. It would be weird stock quantities like 1.799, 1.846, 1.851, 1.799, etc.


The only reason I can think of to make so many small stock purchases is to get the COMMISSION CHARGE every time.

I noticed it is also a LOAD FUND!

Does anyone have an explanation as to why he would make so many small purchases?

American Funds quit selling B shares several years ago. DOn't know how he could still be buying them

 

[73ss454]

Red, understand that this is what these guys do for a living. They are doing what they had to do to generate the most money for themselves. Just be happy that you escaped, look forward and not back.

When I read my first investment book and realizied what my broker was doing to me I broke out in a cold sweat. Just think about all the folks out there that never wake up, you're one of the lucky ones.

 

[Red35]

American Funds quit selling B shares several years ago. DOn't know how he could still be buying them

I said I was looking back at old statements of what he purchased for me. I had been with him for a long time.

He made those purchases from 2003 to 2010.

My statement says he last purchased 1.364 stocks in December 2010.


They must be dividends then.

 

[Red35]

Red, understand that this is what these guys do for a living. They are doing what they had to do to generate the most money for themselves. Just be happy that you escaped, look forward and not back.

When I read my first investment book and realizied what my broker was doing to me I broke out in a cold sweat. Just think about all the folks out there that never wake up, you're one of the lucky ones.

Amen 73.

 

[Red35]

That sounds like the small purchases that result from reinvesting dividends. Maybe he was buying new shares in that B-Fund with the dividends from the same fund or from other funds you owned with him? Maybe it was interest from a MM fund or sweep account?

All this is legit.

Congratulations on your escape from Ameriprise. Now, tell a friend.

Yeah I think they are dividends.

 

[obgyn65]

Yes it is.

The only reason I can think of to make so many small stock purchases is to get the COMMISSION CHARGE every time.

 

[jerome len]

I do all my business with Fidelity or Vanguard so I pay the lowest fees available, investing primarily in index funds. Now, those were load funds, a bad deal for sure. But, he could have been buying a little each month so you were averaging into the market, therefore, not buying at the year's high or low. That's what I do, I buy a little each month, although I may put a large amount into my money market fund and then invest monthly.

This forum will give you a lot of great ideas on how and where to invest your money, wisely and cheaply. Good luck, stay away from high fee and load funds, and you can't go wrong with one of the "major" fund families if you stick to index and no load funds. By the way, I've made a lot of money on my small cap funds over the past 10 years.......have you made money on your account over the many past years you were with Ameriprise? If you did, not to worry........I don't like brokers but other in my extended family do and I hear about every time they make a little money. I'm not so sure I hear about it when they don't. GOOD LUCK!

 

[FinanceDude]

Yes it is.

Uh, no......... Does anyone on here know that dividends and capital gains are typically reinvested? There's no commissions paid on that, just to set the record straight........

 

[Coolius]

Leaving Ameriprise is probably one of the best things you did for yourself.

I have heard little but negative experiences from friends who have had the misfortune to invest their money with Ameriprise; almost all of them have less money than they would have had with a no load index fund from Vanguard. And this over periods stretching up to 8 years!

I have been with Vanguard for many years now; no complaints, except that their commissions for option trades are very high. But as I do not trade frequently in that space, I can live with that.

 

[Rustward]

Uh, no......... Does anyone on here know that dividends and capital gains are typically reinvested? There's no commissions paid on that, just to set the record straight........

+1

Not sure I would use the word "typically" as you did above, but when dividends and capital gains ARE automatically reinvested, there are no commissions, and if it is a loaded fund, there are no loads on the reinvested amount.

Not defending Ameriprise, btw.

Could the OP look at the statement to see what [-]is[/-] was happening?

 

[Rustward]

That sounds like the small purchases that result from reinvesting dividends. Maybe he was buying new shares in that B-Fund with the dividends from the same fund or from other funds you owned with him? Maybe it was interest from a MM fund or sweep account?

All this is legit.

Congratulations on your escape from Ameriprise. Now, tell a friend.

Another +1.

And I would not recommend Ameriprise to anyone.

 

[FinanceDude]

Leaving Ameriprise is probably one of the best things you did for yourself.

+1

I have been with Vanguard for many years now; no complaints, except that their commissions for option trades are very high. But as I do not trade frequently in that space, I can live with that.

VG makes their money on their brokerage side, that's how they can keep their salaried reps...........

 

[73ss454]

VG makes their money on their brokerage side, that's how they can keep their salaried reps...........

At 2 bucks a trade for equities I can't imagine they pay them very much.

I doubt that if I call Vanguard Brokerage I'll be getting FD on the phone.

 

[Red35]

+1

Not sure I would use the word "typically" as you did above, but when dividends and capital gains ARE automatically reinvested, there are no commissions, and if it is a loaded fund, there are no loads on the reinvested amount.

Not defending Ameriprise, btw.

Could the OP look at the statement to see what [-]is[/-] was happening?

I was an ignorant fool and completely trusted my broker.

The statement does not specify if they are reinvested dividends or not.

I'm just glad to be out of Ameriprise now.

 

[Red35]

Here is what my SEP IRA looks like.

Open End Mutual Funds:
FRANKLIN CUST GRWTH B (FKGBX) $430.73
FRANKLIN GROWTH FD A (FKGRX) $1,449.51
FRANKLIN INCOME FD B (FBICX) $443.55
FRANKLIN INCOME FUND-A (FKINX) $2,804.27
MUTUAL SER FD SHS CL B (FMUBX) $361.05
MUTUAL SHARES CLASS A (TESIX) $2,057.74
SMALLCAP WORLD FD B (SCWBX) $1,041.11
TEMPLETON GROWTH CL B (TMGBX) $339.24
TEMPLETON GROWTH FD A (TEPLX) $1,199.65
Total Funds: $10,126.86

Common Stock:
ISHARES MSCI EAFE IN ETF (EFA) $3,056.02
SPDR S&P 500 TRUST ETF (SPY) $5,238.24
VANGUARD MID CAP ETF (VO) $1,887.08
VANGUARD MSCI EMRG ETF (VWO) $2,821.00
VANGUARD SMALL CAP ETF (VB) $1,911.00
Total Stocks: $14,800.24

Money Market: $281.26

Total SEP: $25,208.35


This is what my ROTH IRA looks like:

Mutual Funds:
SMALLCAP WORLD FD INC B (SCWBX) $6,666.31
SMALLCAP WORLD FUND CL A (SMCWX) $71.58
Total Funds: $6,737.89

Common Stock:
SPDR S&P 500 TRUST ETF (SPY) $3,977.60
VANGUARD MID CAP ETF (VO) $7,120.68
VANGUARD REIT ETF (VNQ) $5,658.02
VANGUARD SM/CAP VALU ETF (VBR) $3,503.92
VANGUARD VALUE ETF (VTV) $2,888.48
Total Stocks: $23,148.70

Money Market: $43.15

Total ROTH: $29,929.74



Coincidently he purchased my Vanguard stocks after I had a meeting with him in 2006.

I had watched Suze Orman prior to this meeting and she was recommending Vanguard FUNDS.

So in my meeting with him I told him I wanted Vanguard FUNDS.

But he put me in Vanguard stocks not in funds like I specifically requested.


It's my own fault for being an idiot though.

 

[youbet]

Well Red35, I can't comment on the holdings in your Ameriprise account other than to say you have a lot of opportunities to educate yourself on investing, especially in the area of understanding "common stock" vs "ETF's" vs mutual funds. It's a lot of fun and I'm sure you'll enjoy diving in and learning.

 

[Alan]

Well Red35, I can't comment on the holdings in your Ameriprise account other than to say you have a lot of opportunities to educate yourself on investing, especially in the area of understanding "common stock" vs "ETF's" vs mutual funds. It's a lot of fun and I'm sure you'll enjoy diving in and learning.

+1

That is a lot of funds and ETF's (21) that you have there.

 

[FinanceDude]

I doubt that if I call Vanguard Brokerage I'll be getting FD on the phone.

True, I couldn't afford to quit my business and make $35,000 a year and live in Boston........

 

[Red35]

For my future IRA investments I am only going to be purchasing Vanguard Funds.


However, should I just get out of all of the class A and B Stocks and take the hit now?

 

[73ss454]

If you are talking about stocks and not funds I'd just switch everything over to Vanguard and worry about it once you run a tax caster. I use the one offered by turbotax.

No reason to sell the stocks if they are at Vanguard Brokerage.

 

[FinanceDude]

For my future IRA investments I am only going to be purchasing Vanguard Funds.

That's up to you, Dodge and Cox and others are ok too.........

However, should I just get out of all of the class A and B Stocks and take the hit now?

Can and ask what the total surrender charges are. Compare that to how much you will save by moving to much lower expense ratios, if its close to a wash, you ahve your answer...........